more about the bozos down there in washington. >> his father is in the legal business, he said his business in estate planning has never been better. he's thinking about writing a letter of thanks to washington because with the resumption of the estate tax at $1 million as opposed to today's $5 million, there's a lot of gifting going on and that's one of the unintended consequences there. >> yes. we've seen all kinds of them happening at the end of the year because of the fiscal cliff. >> absolutely. >> see how it all goes. >> taxes are going to go up anyway because of the medicare surcharges and so forth on investment. >> obama care, we're going to feel all kinds of effect. >> that will do it for today's edition of "power lunch", folks. >> street stiens begins right now so don't move. free speech and stocks sink. a senate leader says the cliff

is coming. we've got your cliff jumping playbook ahead. housing has been all hoping lately helped by the fha in part or has it? your guess says the agency is hurting working class families. plus, some incredible stats on amazon.com sales over the holiday season and we will unveil which retail stock has been higher every first quarter for the past nine years. the name, mandy, sure to amaze. indeed. our mystery chart of the day. thanks a lot, harry reid. with today's losses we have wiped out december's gains on the stock market. today, also by the way, takes the very dubious prize of being the worst day of december for all three averages and the worst day since november the 14th. we are now down on the stock market for the fourth day in a row and the vix, guys, is jumping. let's get straight down to the trading store and find out the buzz. seema modi is manning the nas

desk. >> a deal to avoid the fiscal cliff thought it was a certainty at the beginning of the month. today not so much. senator reid's comments and a dismal report triggering a selloff that a lot of pessimists had expected sooner than today because they didn't think the deal on the cliff would be done. the dow dropping below 13,000 for the first time today sings the beginning of this month. now negative as well for the month of december. trading at a three-week low with all 30 of the dow components in negative territory. with the dow below 13,000 the s&p is notching up its fourth straight loss trading below a 50 day moving average and also hitting a three-week low. if investors are moving out of stocks, where are they moving into? safe haven. a treasury e.t. after saving a bid after investors have a secure place to put their money. gld or gold up. gold seen as a safe haven. so it, too, is benefitting from that rush or flight to quality, flight to safety. and then of course on the heels

of very modest gains in the metal itself, gold, there is strength in gold stocks as well today. they, too, are moving higher. other than that, a very broad-based decline, mandy. all ten of the sectors move forward lower. all 30 of the dow numbers down as well. seema, over to you. mary, naturally when you have a lot of risk or uncertainty on the table, you see people move out of high growth sectors like tech. the nasdaq did extend its losses after senate ma jord leader harry reed made his statements. investors are using a risk off approach to getting stock specific. apple shares trading around the 505 level. it seemed to be hitting a resistance level at 514 and then it moved lower. that's a pattern that traders are watching. some of the bright spots in yesterday's trade moving some steam. netflix, its outage issues,

research in motion we spoke about that reversing its direction moving to the down side. other weak spots include marvell on that patent infringement case. it's one of the worst performing stocks in the philadelphia semiconductor index. also take a look at shares of facebook trading in negative territory. down better than 3%, mandy and brian. >> seema, thank you very much. markets aside, let's turn to eamon jabbers. he is in the center of washington, d.c. things are moving fast and furious. most of that is coming with talk. we've also had some conflicting information. eamon, set us straight. >> brian, that's right. the center of the financial universe has been senator scott brown's facebook page of all things, he is the defeated massachusetts senator. he lost to elizabeth warren. he still sits in the senate until the new senate is convened in january. so he posted on his facebook page that he was heading back to d.c. take a look at what he actually said.

he said, heading back to d.c. just learned that the pres reached out the gop leadership with a proposal. it is the first such proposal to be put forth eager to see what it is, how it should be serious. he said he hopes it is a serious proposal. so meanwhile the white house responding very quickly to that. they're saying over there a senior administration official there is no proposal being sent up today. scott brown is wrong. so we'd like to hear from senator brown as soon as he gets to washington about why exactly he posted that on his facebook pain and what he meant by a proposal, but the administration official eager to knock that down. a little bit of drama about whether we had a counter offer here. apparently we do not have a counter offer. we will be monitoring facebook, twitter, instagram and maybe even my space for all the latest developments. >> it is a sign of the times, isn't it, eamon. markets moving, political gyrations get put on facebook pages.

wouldn't you say? >> you need to build a giant algorithm that monitors everybody's facebook page plus all the twitter feeds and instagram. if you can pull that together, you might have something. >> eamon, we have pulled all that together. it's called cnbc. here we are. >> this is what we're doing today. >> we are your one stop shop. thank you very much, eamon. is today's drop in the markets all about the fiscal cliff? let's bring in tim and dan greenhouse. dan, i guess you can do a victory lap on this. maybe it is a period victory. from day one you have said we are going to go over that cliff. >> this is certainly not a victory lap we wanted to take, but i like to say that our analysis was rooted in what i would call reality. and reality has played out sort of basically as we foresaw it. the problem now, of course, is the conversation turns to not whether or not you're going over the cliff, it appears that we are, but how long are we off of the cliff. that's where the real economic and stock market damage may arise. >> how bad do you think that reality is going to be, dan?

>> that's a lot harder. i think absent a market shock to spur policy makers into action, it's hard to see where the urgency comes from. to the extent that the white house and treasury can delay federal withholding tables, the average taxpayer is not going to see anything meaningfully different in their paycheck other than a 2% payroll tax. there isn't going to be an immediate hit that would lead to the types of calls and action necessary for policy makers. >> i am very confused, which is easy to do. why does the market keep going up over the last couple of weeks and months even as we head toward the fiscal cliff? >> we've created a society of people that expect the last-minute heroics to save the day. if you go back year after year after year our politicians are so dysfunctional and somehow miraculously at the last minute they seem to play nice. it's a ridiculous premise because we gets this false sense of promise. we're getting cliff fatigue for

crying out loud. when i look at this, the reason we're not seeing gold spiking and a flight out of the market is because everyone's going i've seen this before, i won't get myself nuts. what will be interesting is what happens when the new year starts and people realize, oh, they didn't save it this time? so it's really -- i think there's a lot of complacency. >> i guess what we need to know, and it's impossible to know overall but i'm going to ask anyway, if an average family loses $500 a month due to the fiscal cliff, right, what are they going to cut back on, investing, saving, spending? >> well, that's a great question because what's going to happen is it's going to start trickling. they're not going to feel the cumulative effect until february or march if it stays that long if we don't do a fiscal bungee jump. you'll see it's first affecting small global businesses. the nice high end restaurant be that needs people to come in and not downsize their entertainment. the discretionary spending type of things on a local level is

going to kind of get crushed first. in some ways, it's sad to say but it's the silver lining. those are the people that will pick up their phone and call the congressman saying i'm dying out here on the front lines. you guys figure this out but get back to business because i need to get back to business. >> i don't know that we can say with any certainty that we know how consumers and citizens may react. quite frankly, we've never had the type of tax adjustment occur all at once the way that this is occurring today and the level of uncertainty. let's remind ourselves, taxes are not just with respect to the fiscal cliff, not just going up on the wealthy, the rich, or even upper income brackets. they're going up on everybody across the board. it's very hard to gauge how that will have a psychological and sentiment effect in terms of actual real consumer spending. >> to brian's point, do you think people will spend less? are they going to spend the same amount that they've always spent? they'll just save less? they'll save less, put less in their 401 k's?

>> they're seeing less money in their paychecks on a weekly basis and as that reality starts sinking in, i think that's going to affect people's habits. i don't hear a lot of people talking about the amt adjustments for the year end 2012. there are lots of people going to get socked with thousands of dollars. >> hold on. i'm sorry to interrupt. we're never going to get to the point where the amt hits 30 million extra people. the white house and treasury has extraordinary -- on the other hand, the white house and treasury has an extraordinary amount of leeway in order to delay the type of withhold that go would hit the average citizens. this is going to be solved by taxes. >> how confident are you on that, dan? are you over here -- pirate eye patch and a hat on the air if you're wrong? >> i'll bet you -- gambling is illegal. i will not bet but i will buy you a drink if this is not solved by tax day. >> i want to be on the line there and do the pirate dance is all i'm going to say.

we've got to leave it there, ken and dan. arrrrr. >> arrrr you ready for thursday trivia, maty? can you name -- here's our trivia question for today. thanks, guys. the retail stock that has been up in the first quarter every year for the last nine years? we're going to unveil that name coming up a bit later on. >> i have to say, i was a little bit surprised. anyway, plus are commodities right for your portfolio in 2013? they've been pretty shabby as a return on investment in 2012. we'll get some predictions next year. and has the fha failed at its mission? fannie mae's chief credit officer says, yeah, they have. he'll join us with why next. hi, my name is madeline alfardo. we employ 400 people. the fiscal cliff is going to

impact our business. who knows how much we can spend to increase our business. an expansion may not be possible. the customers are so uncertain how they will spend their money that eating out may be a luxury. it hinders our expansion. this is an american issue. the american people have been on a roller coaster for the past four years. it's time for them to get on stable ground. we believe the m, the better you trade. so we have ongoing webinars and interactive learning, plus, in-branch seminars at over 500 locations, where our dedicated support teams help you know more so your money can do more. [ rodger ] at scottrade, seven dollar trades are just the start. our teams have the information you want when you need it. it's another reason more investors are saying... [ all ] i'm with scottrade.

whatever, have helped to contribute to the hopium. here's a big question. does the fha do what it was meant to do, help lower and middle income families achieve their dream of homeownership or does it hurt? fannie mae's former chief credit officer just did a big review of fha's policy says the agency, which by the way is running at a $16 billion deficit this year, may be doing more harm than good. ed pinto joins us now. ed, you went back and reviewed more than 2 million different mortgages. everybody says the fha is good for america. you beg to differ. how come? >> thank you, brian. pleasure to be here. fha is really a tale of two

neighborhoods. it makes low risk loans relatively speaking in certain neighborhoods and it makes high risk loans in other neighborhoods. it calls the average okay although as you indicated it's actually has the substantial negative net worth. it calls it on the average that it's okay. the average doesn't work for the 9 nourks neighborhoods that we studied where the average foreclosure rate for the 2009 and 2010 originations, which were well after the financial collapse, where those originations are expected to have about a 10% foreclosure rate minimum and an average foreclosure rate of about 15%. so it's really putting borrowers in these neighborhoods on a tight rope without a safety net and they're literally a water heater or a roof leak away from disaster. >> so to paraphrase, let's say you have a house with eight streets on it. a couple people are doing well. somebody is given a loan they

should never have gotten. they will not pay it back. they abandon their home. in your study then, that one abandoned home could ruin it for the other seven homes on the block regardless of their credit profile? >> absolutely. it has a ripple effect on the entire neighborhood. and what also is creating a problem is in these neighborhoods the main lender is fha. most of the people getting loans in these neighborhoods are getting fha loans that are just too risky. there is a solution here, and the solution is quite simple. fha just needs to reduce the risk layering, level of risk that it's putting borrowers into. it tends to stack things up. it takes a very low downpayment, virtually all the fha loans have that. secondly, they virtually all have 30-year loans, very slow at amortizing. they all have very high debt ratios. then it gives about 30% of the borrowers that have poor credit, it gives them one or more, two

or more of the various characteristics, and that's where they run into trouble. they need to back off on that. >> couldn't you argue that on the same street eight homes, four of them are fha loans, one goes bust, they foreclose, but three others wouldn't have gotten a loan but for the fha. they maintain their loans. couldn't you say there's a 75% success ratio there? >> that's been the argument that's been made for quite a number of years, not to criticize too much angelo mozillo made that argument about subprieb, 80% perform, 20% don't. the problem is when they get concentrated in one area. the one default has the ripple effect on the other seven homes. and then for every loan that goes into foreclosure at fha, another one or two loans go delinquent. they're delinquent, might be seriously delinquent. you have impacts on the individual's credit history.

one delinquency can knock their credit score down by 40 points. you have life, impact on crimes, children, schools. it ripples throughout the neighborhood. fha has been documented, i had a piece come out in "american banker" that talked about 60 years where fha has been failing its mission since the 1950s by making very risky loans that get concentrated in particular neighborhoods. >> which is how we found you, reading "american banker." ed, powerful piece. thought provokiinprovoking. thank you very much. >> in the meantime, you are looking live at house minority whip steny hoyer speaking about the fiscal cliff. he's saying that congress needs to get together for a compromise. we're going to monitor this situation and we'll let you know if he breaks any news. in the meantime, 12 months ago, brian, you had a few

predictions for this year so it is that time of year that we roll out that list and we do see how many of them came true. we're going to hold your feet to the fire, by the way. you're not getting away scott free on this one. i can't wait. plus, a few retail surprises this season. which ones raked in the cash. which ones may have flopped? that is still ahead. and also frequent flyers need to take stock of their status in the next couple of days. how to protect your purse for 2013 a little later on "street signs." stay right here on cnbc. >> announcer: the cnbc real time exchange market snapshot is sponsored by interactive brokers. >> announcer: interactive brokers, the professional's gate way to the world's markets. andm two things -- cook what you love, and save your money. joe doesn't know it yet, but he'll work his way up

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i appreciate it. i'll be right back. they didn't take a dime. how much in fees does your bank take to watch your money? if your bank takes more money than a stranger, you need an ally. ally bank. your money needs an ally. welcome back, everybody. tomorrow brian and i are going to walk you through some of our big predictions for next year, but right now it is reality check time where i get to toast and roast brian over the

predictions he made in the last year. you can defend yourself. let's go to the toast. the u.s. will avoid recession. >> you got that right. >> not only did we avoid it. we grew the economy. not great. we grew it. i was right. you're welcome. >> u.s. stocks will rise 5 to 8%. as far as the dow goes, i'll give you this one. the dow was up 6%. you nailed that one, however -- >> no. >> -- the nasdaq was up 14%. >> so what. >> the s&p was up 14%. >> so what? dad, dad, dad, i'm going to get a b and then you bring home an a. is dad going to be mad? >> i don't know. >> no. i don't care if i'm above it. if i under estimate the gains, i'm happy with that, right? five gains percent on the dow. we rose for 7%, 6.5% now. that is spot on nailed it. even a blind squirrel finds a nut sometimes.

>> yeah. >> underestimating the gains. i'm pretty happy about that. let's end be the segment right here. >> no. i'm going to give you this one. i'm going to start to roasting you. i'm going to put you on the barbie. you botched it. good for you putting it out there. number three was the eurozone's bailout is going to top 2 trillion bucks. >> i don't think i'm wrong on this one. you know, it's hard to know. first off, easy with the x's on the screen. the eurozone bailout is next. i don't know if i'm wrong. it depends on who you ask. the facility for lending is above 2 trillion so i think i'm pretty close to right. have they tapped that much? no, but that much is available to be tapped so why don't we split this and call it 50-50. i don't think that's wrong. i think it just hasn't been tapped all the way yet but it's there. >> okay. maybe 2 trillion might be a little more correct. >> no, 2 trillion dollars, be fair. >> a technicality.

prediction number 4. this is a big klunker. big, big, big klunker. euro reaching parity with the dollar. sorry, buddy, didn't happen. >> hey, stupid euro. . there's my analysis. >> try the aussie dollar. gold will drop at least 10%. now, i don't know, i mean, like gold didn't perform nearly as well as a lot of people thought. a lot of people thought we would reach new record highs. you know, i know we did and then we came back down a fair amount. but over the course of the year you were going to say it was going to drop 10%, right? >> you know, we're up a little bit on gold. it's come well off its high. i was wrong, wrong, wrong. i've been wrong on gold for two years in a row. when the dollar -- when the dollar starts to really strengthen, i believe gold will drop. those two predictions, by the way, mandy, if you read them on the blog from cnbc last year were tied together. when i'm right -- not if, when i'm right on the dollar, euro

dollar, gold will do that. maybe not in our lifetime. i was wrong. >> well, you're a very big man to be able to say that. at least two out of five isn't bad. >> three out of five. 2.5. >> tomorrow, brian, we're going to give our predictions from both of us. i'm going to put myself on the line as well. i've got a big prediction about stocks and what could be -- oh, sorry. you've also got a big prediction on what could be a megadeal in pick land. >> your prediction is on apple. we're both in tech. i foresee a giganto deal in tech. i will tell you who i think will buy whom. huge company. both california based. probably a 40e, $50 billion tech deal. total guess. my knee hurts so that tells me it might be right. >> fantastic. if you have any 2013 hits or predictions, you can tweet them in. in the meantime, let's get out to kayla. she's back at the mothership. what are you watching? >> we're watching michael kors.

hot holiday stock. down shy of 4% on the back of comments of citigroup. analyst oliver chen saying they showed a bit more heavy discounting than originally expected. 30 to 50% off a lot of the models. similar to black friday and that discounting is continuing. we should note that even though stock is down, oliver chen raised a buy trading at 48 bucks. even though he says there's discounting, we see upside, mandy. thank you, kayla. we'll talk about the 2012 predictions. what happens next year. we'll get some guesses on the commodities. >> and have you figured out which major retailer has been a sure thing for nine straight first quarters? that is the mystery chart. that's the stock chart of this name. it is not dropped in a first quarter in nine straight years.

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the markets are seeing a spike. mary, it really feels as though people are getting spooked about this fiscal cliff deal. >> many people, mandy, are saying it's about time they did. the dow is hovering 10 points above. all three of the major indices in the red. financials and tech stock. the stalemate, the lack of progress on avoiding the fiscal cliff. it's making it clear to investors that tax hikes and spending cuts will kick in in the new year. that's the reason for the selloff. back to you. a quick check in on what's happening out there. in the meantime, that was mary thompson of the nyse. brian over to you at the mothership. >> we're going to do rapid fire.

five stories you need to know about in 60 seconds. let's get going on this. apple, compensation news. ceo tim cook got 4 million bucks from 378 million last year. how will he eat? no stock award. four other apple execs got stock a warts of $66 million this year. >> not bad. domino's pizza, all time high. on pen hiemer says it could be up for a higher sale year and overseas on pen hiemer races its target from 50 to 44. the ceo of dominos, the ceo of the year award. first and only burbee. diod maker, dio. 151 million. they expand their presence in china. year to date. on a serious note, serious topic. smith and wes son, that stock moving higher again today. another $15 million buy back. there it is, $20 million buy

back. maybe sadly we know that gun sales have, indeed, risen lately. the vix. the volatility index. measure of fear in the market, if you will, back above 20 for the first time since july 25th mandy. >> maybe it's about time. in the meantime, commodities have had their ups and downs in 2012. will the roller coaster continue in 2013. we have some predictions. >> reporter: resources that come out of the ground hinge on everything from the weather to how easily it's found in nature. the worst drought in nearly 50 years sent agricultural commodities skyrocketing in the summer. wheat, soy beans, oats, and especially corn were some of the best performers in the market. in light of the devastation to many crops, farmers will ramp up plantings to record levels. and if weather patterns return to normal, then production will reach new highs and pressure grain prices along the way.

then there's gold. the precious metal made a run towards $2,000 an ounce twice this year but then fell short. will the new year be the year that gold reaches a new high? additional sovereign debt and continued action from central banks and the world to buttress the markets and the economy could send gold on another record run. and then there's palladium. the market will turn to a deficit in 2013 on increasing demand in the auto industry where palladium is used in exhaust systems for cars. combined with decreasing global supply, especially in south africa and russia, which control a number of the world's palladium mines, a rally that began in earnest in 2012 will go into overdrive in the new year. all right. so then how should you play commodities next year? let us bring in rbc's george gero with his take on gold, silver and copper, and andy

lit li lithbm. silver kicked butt. will it do so next year? >> i think so. i'm wearing my silver bullish cuff links if you notice that. i think this is the year for silver. silver is a bridge between investment demand and industrial demand and this year i think we're going to have both. >> how high do you see silver going, george? give us a number. >> i can't give you a specific number, but i'll give you a range of somewhere between oh, 40 to $45. >> okay. and that's your number one pick for next year, george. andy, you're over in the energy patch. what do you see for crude, gnna gas and for what we pay at the pump. >> for crude, it will be where it is today, $90. in between now and then we'll see it go down to 82 and as high as 100. as far as what we pay at the pump, i'm seeing next year the low is going to be about $3.10 in the wintertime rising to

about $3.70 in the summer and hurricane season. as far as natural gas goes, i think there will be continued pressure on natural gas. we still see a lot of drilling as the drillers go after the liquid portion of the natural gas. i see that going back to $3 a million btus. >> is there a wild card here? what we're seeing is a bit of a comeback? is there a wild card that for example if china does get its free act together that we could see crude prices go much higher, andy? >> that's exactly right. china import and refine a record amount of crude oil in november, but i do see that production in the u.s., which is up 17% from this time last year, will be exceeding 7 million barrels a day next year. increases from a rock are adding to supply. the real wild card might be if iranian oil returns to the market where we see 1 to 1.5 million barrels off the market

and opec is quite pleased at that to keep prices high. hey, george, is gold even though i guessed very incorrectly on gold, i will say it again, i was horribly wrong, is gold a screaming buy because of all the selling ahead of the fiscal cliff or higher capital gains reached right now? do you think it's an artificial dip? >> i think it is more than an artificial dip. i think you had smart to the market selling by december 31st you're going to have to pay taxes and whether you have taken your profit or not taken your profit. the second thing is of course evening out from the funds for year end and the third thing is of course gold did not look at incompetent flags upcoming in the last four weeks gold has been looking at the possible recession because if we're going to have less spending and higher taxes and a cap on the economy, then of course you don't need gold to preserve purchasing power so the gold managers have

been pairing down gold and looking at other staassets. they've been looking at platinum and palladium. you have 11-year-old car fleets that have to be redone at some point. new sales. 400,000 cars that were damaged over a period of time in the storms. 250,000 superstorm sandy here. 40,000 pounds of copper go into a car. housing has turned up a little bit. you have 400 pounds of copper in every new home at least, not even the commercial buildings. >> george -- >> that could being. >> -- would you say that gold is no longer a good safe haven? to me it's been acting like a risk asset and not a safe haven anymore. >> people don't understand what is meant by safe haven for gold. the gold prices is an economic and political barometer not of just the economy but political well-being of the world. there's another saber-rattling.

korea firing rockets. you have problems in the middle east. you have major problems that we haven't seen lately because of fiscal cliff and the headlines from italy and spain and of course portugal and greece is not finished yet. >> right. >> so there's plenty of problems. we're going to return back to basics after the fiscal cliff. people will say, you know what, i do need some place to put my money. >> probably not in the backyard or under the pillow. thank you for joining us. brian. meantime, big news from d.c. not on the fiscal cliff. it is that epa administrator lisa jackson is stepping down. her term really has been marked by battles over things like the keystone xl pipeline and coal fired power plants. just this month alone the epa has enacted rules that will cost businesses billions of dollars in regulation. that's why some may be saying good riddance.

let's bring in robert costas. isn't that harsh? listen, you don't have to agree with her. she had her vision and she went for it. what's wrong with that? >> i think it's not harsh at all. this has been one of the most activist administrators in the obama administration. she comes in in 2009. immediately she gets to work on cap and trade. it fails in the senate. since republicans took over the house in 2010, she has not had a lot of success. >> isn't that what she was supposed to do. couldn't you say there was by the election of barack obama a mandate on climate change and environmental reform. >> i disagree. i think ms. jackson would disagree. one of the reasons she's leaving if you read her statement, she seems disappointed that her green agenda has not come to fruition in the obama administration. the president has been focused on the jobs and the economy trying to win election. she's gone after coal and angered a lot of businesses for her regulatory posture. a lot of people on wall street

will be happy to see her take the door and leave. >> they might be happy to see her take the door and leave but what kind of person is going to succeed her, robert? will there be a person who's just as activist and radical or someone who is just as friendly? >> that's a great question. they expect the deputy epa director to succeed her right know. long term this is a real decision for the obama administration. lisa jackson was a green activist in that role. if obama picks someone like her to succeed her, that means in his second turn he'll go after climate change and the green policy and the agenda. if he doesn't, i think you'll see them complain that he's not going far enough. >> do you think whoever comes in will be supportive of the keystone xl pipeline or no way? >> the president has been semisupportive. >> he keeps kicking the pipeline down the prairie. >> he keeps kicking it down the prairie. he doesn't have a real position on it. i think a lot of that was due to the election during the 2012

campaign. obama didn't want be to go fully against fracking. lisa jackson's fully against fracking, against coal. so we're going to see the obama administration programs move towards the center. lisa jackson comes in in 2009. democrats control the house and senate. she's pushing for a lot of things. republicans are always pushing back on the epa. it's not as big a position as it was when she came in. >> bottom line, do you think the environment is better off for her legacy? do you think she's done more good than harm? >> in terms of the markets and looking at her tenure, you can say it was tumultuous. she was under investigation for how she used her internal e-mail. the one success she did have from a democratic perspective, she improved fuel efficiency standards. that's probably her main legacy as well as the lost cause perhaps on climate change. robert, thank you very much, buddy. you have a happy new year. appreciate it. >> thank you. some of you have gotten this

right on twitter. here's another hint about the retail stock that has been a first quarter juggernaut. it more than doubled in the first three months of this year but has sunk recently. >> on a day like this, where is herb. >> he's sunning himself shirtless in stamford, connecticut. >> plus, jane wells is tracking the holiday retailers who were winners and losers. >> mandy, we have new data suggesting there was a last-minute surge in spending. really? we're going to look at those numbers after the break. [ male announcer ] how do you trade? with scottrader streaming quotes, any way you want. fully customize it for your trading process --

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♪ the lexus december to remember sales event is on. this is the pursuit of perfection. coming up on closing bell, red arrows on wall street so far. there's no resolution to the fiscal cliff out of washington yet. should we rule out any hope of a last-minute deal before year's end. texas senator kay bailey hutchinson joins us to give us their views. plus, we have a host of market experts weighing in on the odds of a u.s. debt down gradient if the u.s. can't get its house in order by next year.

let's see if that will derail the housing industry that picked up steam this year. it's all ahead. mandy is joining me ahead for the last hour of the day on "closing bell." >> bill, thank you very much. before we get to the secret stock, there it is, zesears. according to a republican house aid, the gop or the house will reconvene 6:30 p.m. on sunday night. so here we go, folks. you were talking about a potential last-minute deal. guess what, congress is still out. according to republican aid, they will be coming back to the house beginning a session at 6:30 sunday night. look at the markets. we're still down 99, folks. far right side of your screen. we are seeing a bit of a turn. we had the reid comments earlier. hey, we're going to go over the cliff. that sent it down. now we're seeing a turn. we'll have more on this. i'm sheer eamon jabbers is rushing back to a camera in the segue as we speak.

in the meantime, thursday trivia. sears is the answer. it is the retail name, maybe not the only one, but the only big one that i could find that every first quarter for the past nine years has posted a positive return in the first quarter. big shout out to my buddy jeff tudor. he told me this at a christmas cocktail party. i said, you're full of you know what. guess what? he was right. sears, average return, 33% the first quarter. by the way, sinking lately. okay. in the meantime, since we're talking about retailers -- we have eamon jabbers. he did run back to the camera. we're hearing that the house of representatives will reconvene on sunday evening. give us what you are hearing over there in d.c., eamon. >> hi, mandy. i got this confirmed from kantor's office, eric cantor is confirming for me that the house will be back at 6:30 p.m. on sunday, which i believe is what you guys just reported on the air. we have that now with a source that we can attribute that to.

where this is coming from is the gop conference call that was scheduled for 2:30 that we believe is still ongoing right now. and we were told earlier in the day that the house leadership would tell their members 48 hours in advance if they had to be back. now they're telling them they have to be back by 6:30 on sunday so they can make their travel plans over the weekend. no information now from cantor's office or from anybody else for that matter as to what exactly they're going to be voting on, if anything, on sunday, but just this news that they're coming back now about a full 24 hours before we expected to see the house of representatives back in washington for the weekend. that's what we have as of right now, guys. >> talk of coming back. as you can see on this news, eamon, the dow is cutting its losses. at one point it dipped below the 13,000 we'll watch over the last hour of trade whether or not it can even get back to the black. we'll take a very quick break. do stay with us here on "street signs." back in a mo. excuse me, sir i'ma have to ask you to

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all right. there's your dow. we've gom back by house. the house will reconvene on sunday at 6:30 p.m.

where is monty hall? we need to make a deal. meantime, can the holidays make or break an entire retailer's year? heck yeah. cnbc's jane wells in l.a. with some surprises though, jane. >> reporter: one surprise. christmas may not be so bad. got more new numbers from gallup. look at this, a spending surge of an average of $119 per person december 21st through 23rd. $18 more than the same period a year ago. the last might surge raised the 14-day rolling average to $89 a day spending, up 10% from a year ago. now, most analysts say it's been a good holiday for the gap, urban outfitters, costco. no one expects christmas to the upside and craig johnson says weakness in retailers really started last summer. going on for month. back to school wasn't that great. his surprise winners and losers for the holiday including ron johnson. craig johnson says j.c. penney

is turning around, quote, as we speak and apple's stores, johnson's previous store, saw foot traffic peaking and started to decline. sales growth won't be as strong as before, but those still having hope on the holiday include the international council of shopping and goldman sachs and they need to work on that name. they say sales this week, they believe, will raise all of december sales from the current 3% to as much as 5%. that would be huge. back to you. >> jane, thank you very much. all right. another cliff out there, the frequent flier cliff, all right? but you don't have to get on a plane maybe to protect your miles. brian kelly is here. he is the pointsky.com. going to be brief. got to get right into it because of the headlines. how do we save our points and maximize our points flying this holiday season? >> elite status is everything. >> everybody's got it, it seems. >> i know. that's why you've got to get top tier status. >> good grief. >> the airlines will sell you elite miles, so if you don't

have time to get on a plane december 31st, go online. not cheap. delta will sell you 1,000. it's $1,000 but it could pay off >> i check in at the little kiosk, right, would you like to double your miles for, you know, $79, no is always my answer. bad move? >> that's the correct answer. >> that's the good answer. those are redeemable miles, not the good miles. in the end when they try to sell you the miles, not worth it. >> to do you maximize the miles? it's all about the credit card. it's all about how you spend. think about how much money you spend on household things and bills so if you've got the right credit card, get a card that's transferrable, amx, chase, now have these programs where you accrue into a central pool and can transfer to a number of different ones. >> who is good? you don't want the citi advantage card, not like a specific airline. >> putting all your miles in one basket, right? you want chase ultimate rewards,

the card is awesome, airline lounge access and can you transfer to a bunch of different partners. >> brian kelly, thank you very much. got some breaking news out of washington where i take the train down to. amazon posted its biggest holiday season ever, but how many items it sold every second on cyber monday will literally blow your mind into tiny little pieces. we'll have that for you next. i got mine in iraq, 2003. usaa auto insurance is often handed down from generation to generation. because it offers a superior level of protection, and because usaa's commitment to serve the military, veterans and their families is without equal. begin your legacy, get an auto insurance quote. usaa. we know what it means to serve.

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